Kungfu Catering obtains RMB 300 mln venture investment

KungFu Catering Management Co Ltd, the company that houses the hottest brand in the Chinese fast food chain industry, announced on Thursday, that it will be receiving RMB 300 million worth of venture investment from international equity fund Capital Today Group, and Lian Dong Investment Corp, based in Zhongshan, Guangdong Province.

According to the catering company, the venture capital will fund another 100 stores in the coming year, building on its existing 200 stores, thereby accelerating its expansion pace in the country.

The deal is currently awaiting the approval of relevant authorities. Cai Dabiao, president and director of KungFu, did not disclose the amount contributed by each company in the venture. However, he said that KungFu will remain as the controlling holder.

Regarding hearsays that KungFu is planning to float on the Hong Kong stock exchange, Cai said that the decision will be dependent on the company's development strategy. However, he added that the company has adequate cash flow. As such, a listing will probably not occur until two to three years later, and the target listing bourse is likely to be in China.

At present, China's fast food industry is experiencing a period of rapid development. In 2006, China's catering market grew at a rate of 17%. However, long constrained by the bottlenecks in the management, standardization and production, the Chinese fast food industry ranks only the second corps in the Chinese catering market.